SBI report on states' ranking on Covid management - Northeast at top, West Bengal, Chhatisgarh at bottom - FULL SBI Ecowrap research details

The State Bank of India’s Economic Research Department has released the SBI Ecowrap report on 'States’ ranking on Covid management, macro parameters & central government schemes'. North east is at the top while West Bengal and Chhatisgarh at bottom. The report has been authored by Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India. Here are HIGHLIGHTS from the report:-

-India’s COVID graph has improved significantly after the peak reached on 16 Sep’20. The daily new cases have declined since then and are now moving around 35,000, while the daily recoveries are higher than new cases. We constructed a two stage least square (2SLS) panel model with the monthly data from April to November 2020, where tests were first regressed on population to arrive at estimated number of tests given the population of a state / population as a control variable which were then used to arrive at the model estimated number of cases for each state. The results indicate that for India the estimated number of cases is 99.29 lakh which is 4.66 lakh higher than the actual confirmed cases of 94.63 lakh, thus indicating India has done a fairly good job on controlling the spread of the virus. However, state-wise numbers vary widely.

- We have ranked the states on the basis of performance on three broad categories, COVID Management, Macro Parameters (fiscal parameters and CPI) and performance of states on Central Government Schemes. Further, we have combined North East into one. The indicators are identified to have positive or negative impact on states and accordingly they are normalised. Then using Principal Component Analysis the States are ranked for each of the three categories.

-Firstly, for assessing COVID management, we primarily used four indicators, namely gap between the actual number of cases and estimated cases based on our model 2 SLS results, possible number of underreporting of cases, recovery rate and death rate. The results show that North East tops the list followed by Bihar and Uttar Pradesh. Meanwhile, Rajasthan, Maharashtra and Himachal Pradesh are at the bottom of the list.

- Secondly, for Macro indicators, the deviation of GST collection from state budget estimates, market borrowing and CPI inflation are used. Here, North East, Himachal Pradesh and Madhya Pradesh have performed better. While, Bihar, Andhra Pradesh and West Bengal are at the bottom.

-Thirdly, for performance in Central Government schemes, state-wise performance is taken for 5 schemes, One nation one card, PM Svanidhi, PM Samman, ECLGS and PMAY. Ranking of States on the basis of Central Government schemes indicates Uttar Pradesh, Gujarat and Maharashtra are at the top. Meanwhile, Goa, West Bengal and Chhattisgarh are at the bottom.

- By combining the scores attained on each of the three parameters, states’ ranking reveals that North Eastern States are at the top, followed by Uttar Pradesh and Madhya Pradesh. Chhattisgarh, West Bengal and Himachal Pradesh come at the bottom. While Chhattisgarh and West Bengal have fared consistently worse in all 3 parameters, Himachal Pradesh has done quite well in macro management but seems to be lagging in Central Schemes’ implementation and COVID Management. In fact, the hilly and unfamiliar terrain of Himachal Pradesh is holding back the recovery rate and that is acting as a huge deterrent to COVID Management. Regarding implementation of Central schemes, again the nature of the state in terms of inhospitable terrain may be acting as a deterrent!